Suppose That Google Announces That Its Profits for the Third

question 69

Multiple Choice

Suppose that Google announces that its profits for the third quarter of 2016 were $1.6 billion.As a result of this announcement the price of Google's stock declines.The best explanation of this is

• A) market participants expected Google's profits to be greater than $1.6 billion for the third quarter.
• B) market participants expected Google's profits to be less than $1.6 billion for the third quarter.
• C) the stock market is not an efficient market.
• D) market participants have adaptive expectations.